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on Corporate Finance |
| By: | Thomas C O'Connor (Economics, National University of Ireland, Maynooth); |
| Abstract: | In this paper, I examine the valuation effects of trading in the U.S. as non-exchange issues i.e. Level 1 and 144 firms for non-U.S. firms. The study is motivated by two facts; first, while the number of new Level 2/3 issues has fallen 2001, Level 1 issues have remained an attractive listing option for non-U.S. firms. Second, while on theoretical grounds, firms from low-disclosure regimes have most to gain from exchange listing; these firms tend to list in the U.S. as non-exchange issues. Here, I examine whether the continuing attractiveness of, and the tendency of firms to choose a Level l/144a listing is value enhancing. My results suggest that the tendency on the part of firms from low-disclosure regimes to choose non-exchange issues is justified. Relative to their high-disclosure peers, these firms tend to gain most from trading in the U.S. However, for Rule 144a issues, the valuation gains are short-lived. |
| Keywords: | Cross listing, Level 1, Rule 144a, Tobin's q |
| JEL: | G15 G34 G35 |
| URL: | http://d.repec.org/n?u=RePEc:may:mayecw:n1851107.pdf&r=cfn |
| By: | Zsófia Ãrvai; Geoffrey Heenan |
| Abstract: | This paper consolidates previous work on the development of secondary markets for government securities, and focuses on the sequencing of measures necessary for their development. Six main lessons are identified: (i) a commitment to achieving and maintaining a stable macroeconomic environment, especially prudent fiscal policy, should underpin market development; (ii) a sound and transparent public debt management strategy supports secondary market activity; (iii) a deep and diverse investor base is required; (iv) poor market infrastructure leads to high transaction costs, slow order execution, and excessive operational risk, which all inhibit trading; (v) secondary market growth is facilitated by effective monetary policy implementation; and (vi) reforms should be sequenced to ensure even development of all the structures supporting the secondary market. |
| Keywords: | Securities markets , Government finance statistics , Capital markets , Public debt , Monetary policy , Fiscal policy , |
| Date: | 2008–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:08/174&r=cfn |